Big Builder magazine casts an expanded spotlight on the issues facing the CEOs of America's largest home builders with this month's debut of the “Big Builder CEO Forum,” a CEO commentary column that will appear regularly each month in Big Builder magazine.
These are the best of times for big builders. After a record-breaking year for new-home starts and sales of new single-family homes in 2003, favorable financing conditions and market demographics combined with operational and supply efficiencies continue to fuel positive projections for the nation's big builders in 2004.
The 22 largest home building companies now account for more than one-fifth of all new homes sold in the United States and are expected to account for one-third of all new homes sold before the end of the decade. These expectations are based on the market diversity of large home builders and their capital and scale advantages that uniquely allow them to finance growth, purchase labor and materials, and deploy new technology.
In addition to helping change the face of the home building industry in America, the big builders are an important resource for networking, information, and education, and they play a vital role in supporting the political, regulatory, and legal agendas of the 215,000-member NAHB federation. The influence of big builders is expanding—along with our ability to help shape the environment in which we operate. Particularly in this election year, we all have a tremendous opportunity to help shape the outcome of the many challenges our industry faces in striving to meet the country's housing needs.
The CEOs of America's largest home builders have identified issues we consider critical to the future of home building. I can tell you that high-volume builders recognize that we have a major stake in this debate, and we will make policymakers well aware of our position. This column is the first in a monthly CEO perspective commenting on the issues critical to our industry.
One topic that will receive significant attention is civil justice reform. This is an effort to address the climate of frivolous lawsuits that affects housing affordability by limiting the availability and driving up the cost of insurance. Customer satisfaction with homes built today by builders of all sizes is excellent and still improving. There is remarkable quality focus in our industry. Yet home builders in many states are too often denied the right to repair mistakes that do occasionally occur. We have successfully supported initiatives in California and Texas that are changing an adversarial building environment to one that focuses on making it right for the customer.
Another immediate challenge is the ongoing debate in Congress over regulation of the housing Government Sponsored Enterprises (GSEs), Fannie Mae, and Freddie Mac. We recognize and have supported the need for improved financial oversight of GSEs. However, a misstep of the kind others have suggested—such as revoking Fannie and Freddie's GSE status or giving program approval to an agency with no housing experience—could damage the most successful housing finance system in the world and endanger housing's ability to continue providing crucial support to the economy.
Most recently, we put our muscle behind an association-wide letter-writing campaign on GSEs, prompting thousands of personalized messages from housing executives to members of Congress. This effort is just one example of the part we can and must play to help keep our industry on track.
In subsequent columns, we'll use this space to talk more about these and other issues confronting high-profile builders—no or slow growth initiatives, land acquisition and entitlement, housing affordability challenges, environmental regulations, etc. We'll tell you what the big builders, in cooperation with the NAHB, are doing to resolve these issues, and how you can help win the battles that need to be won.
Editor's Note: This column is a forum provided to the CEOs of America's largest home builders who, in cooperation with the NAHB, will address issues of interest. Your questions or responses to this column should be sent to Wyatt Kash, editor, Big Builder magazine, at email@example.com.